Stockhub

Test update: Difference between revisions

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What's the news?
On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023. The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581 (from $ccc). No information on the average selling price of the vehicles has been provided in the announcement.


Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the year is $ccc. The figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our company revenue standard deviation assumption by ccc years to ccc years (from ccc years). All other assumptions are unchanged. The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc).


How does the news impact the valuation of the company?
Accordingly, based on the assumptions provided on the Stockhub platform, the investment remains a 'suitable' one for you if, among other criteria, your required:


* Return level is 39% per year or less in absolute terms;
* Risk level is 42% or more above the market risk level;
* Time horizon is five years or longer; and/or
* Objective is to help accelerate the world's transition to sustainable energy.


==Forecasts==
== What's the news? ==
On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023.


The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581 (from $ccc). Other key highlights can be found in the table below.
No details about the sales price is provided in the announcement.
{| class="wikitable"
|+Summary
!
!
! colspan="2" |Q4 2023
! colspan="2" |FY2023
|-
|
|
|Actual
|Change (%)
|Actual
|Change (%)
|-
| rowspan="3" |Model 3/Y
|Production
|476,777
|
|1,775,159
|
|-
|Deliveries
|461,538
|
|1,739,707
|
|-
|Subject to operating lease accounting
|2%
|
|
|
|-
| rowspan="3" |Other models
|Production
|18,212
|
|70,826
|
|-
|Deliveries
|22,969
|
|68,874
|
|-
|Subject to operating lease accounting
|3%
|
|
|
|-
| rowspan="3" |Total
|Production
|494,989
|
|1,845,985
|35%
|-
|Deliveries
|484,507
|
|1,808,581
|38%
|-
|Subject to operating lease accounting
|2%
|
|
|
|}
== How does the news impact the investment thesis of the company? ==
Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the quarter is $ccc and in the year is $ccc.
The annual figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. The figure also compares to the company's revenue amount in the previous year of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our company revenue standard deviation assumption by ccc years to ccc years (from ccc years). All other assumptions are unchanged.
The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc).
Accordingly, based on the assumptions provided on the Stockkhub platform, the investment remains a 'suitable' one for you if, among other criteria, your required:
* Return level is 39% per year or less in absolute terms;
* Risk level is 42% or more above the market risk level;
* Time horizon is five years or longer; and/or
* Objective is to help accelerate the world's transition to sustainable energy.
{| class="wikitable"
|+Forecast change(s)
!Year since company inception
! colspan="4" |19
! colspan="4" |20
! colspan="4" |21
! colspan="4" |22
|-
!Year end date
! colspan="4" |'''31/12/2023'''
! colspan="4" |'''31/12/2024'''
! colspan="4" |'''31/12/2025'''
! colspan="4" |'''31/12/2026'''
|-
!
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
|-
!
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
|-
|Revenue
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|-
|Cost of goods sold
|
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|-
|Gross profit
|
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|-
|Operating profit
|
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|Net profit
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{| class="wikitable"
|+Assumption change(s)
!
!New assumption
!Old assumption
!Commentary
!Assumption absolute change
!Assumption relative change (%)
!Resulting target price absolute change
!Resulting target price relative change (%)
|-
| colspan="8" |<div style="text-align: center;">'''Revenue'''</div>
|-
|What's the estimated standard deviation of company revenue?
|6 years
|6 years
|Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here.
|Zero
|Zero
|Zero
|Zero
|}
=== Forecasts ===
{| class="wikitable"
{| class="wikitable"
|+Financials<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" /><ref>Source: Stockhub Limited</ref><ref name="Note04" group="Note" />
|+Financials<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" /><ref>Source: Stockhub Limited</ref><ref name="Note04" group="Note" />
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!'''16'''
!'''16'''
!'''17'''
!'''17'''
!18
!18
!18
!19
!19
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|'''31/12/2020<ref name="SEC" />'''
|'''31/12/2020<ref name="SEC" />'''
|'''31/12/2021<ref name="SEC" />'''
|'''31/12/2021<ref name="SEC" />'''
|'''31/12/2022'''
|'''31/12/2022'''
|'''31/12/2022'''
|'''31/12/2023'''
|'''31/12/2023'''
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|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
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|
|
|-
|-
| colspan="61" |<div style="text-align: center;">'''Income statement'''</div>
| colspan="60" |<div style="text-align: center;">'''Income statement'''</div>
|-
|-
|Revenues ($'million)|| 0||0||0.073||15||112
|Revenues ($'million)|| 0||0||0.073||15||112
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|53,823
|53,823
|81,462
|81,462
|$78,935
|$112,257
|$112,257
|$154,816
|$154,816
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|$2
|$2
|-
|-
|Gross profit ($'million)
|
|
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|
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|
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|
|$23,680
|$33,677
|$33,677
|$46,445
|$46,445
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|$1
|$1
|-
|-
|Operating profit ($'million)
|
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|
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|
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|
|$11,840
|$16,839
|$16,839
|$23,222
|$23,222
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|5,519
|5,519
|12,556
|12,556
|$9,354
|$13,302
|$13,302
|$18,346
|$18,346
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|$0
|$0
|-
|-
| colspan="61" |<div style="text-align: center;">'''Balance sheet'''</div>
| colspan="60" |<div style="text-align: center;">'''Balance sheet'''</div>
|-
|-
|Total assets<br />($'million)
|Total assets<br />($'million)
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|62,131
|62,131
|82,338
|82,338
|
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| colspan="61" |<div style="text-align: center;">'''Other'''</div>
|-
|Employees
|NA
|70
|268
|252
|514
|899
|1,417
|2,914
|5,859
|10,161
|13,058
|17,782
|37,543
|48,817
|48,016
|70,757
|99,290
|127,855
|
|
|
|
|
Line 556: Line 734:
|}
|}


 
=== Risks ===
ccc


{| class="wikitable"
{| class="wikitable"
|+Assumption change(s)
|+Risk change(s)
|-
!
!
!New assumption
! colspan="2" |Risk
!Old assumption
! colspan="2" |Risk change
!Commentary
!Resulting target price absolute change
!Resulting target price relative change (%)
!Assumption absolute change
!Assumption relative change (%)
|-
|-
| colspan="8" |<div style="text-align: center;">'''Revenue'''</div>
!
!New
!Old
!Absolute
!Relative
|-
|-
|What's the estimated current size of the total addressable market?
|Beta
|$2,975,000,000
|2.12
|$2,975,000,000
|2.12
|Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 trillion.
 
 
If the TAM is defined as the global energy market, then research suggests that the estimated size of the market is $6.777 trillion.<ref name=":16">https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf</ref>
|Zero
|Zero
|Zero
|Zero
|Zero
|Zero
|-
|-
|What is the estimated company lifespan?
|Adjusted beta
|60 years
|2.12
|60 years
|2.12
|Tesla employs around 110,000, making the company a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>
|Zero
|Zero
|Zero
|Zero
|Zero
|Zero
|-
|-
|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?
|Recommendation
|3%
|Suitable
|3%
|Suitable
|Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.
|Suitable
|Zero
|Suitable
|Zero
|}
|Zero
 
|Zero
=== Valuation ===
|-
ccc
|What's the estimated company peak market share?
|10%
|10%
|The Stockhub users estimate that especially given the leadership of the company, the peak market share of Tesla is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Tesla's current share of the market is estimated at around 1.8%.
|Zero
|Zero
|Zero
|Zero
|-
|Which distribution function do you want to use to estimate company revenue?
|Gaussian
|Gaussian
|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function  (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so the Stockhub users suggest using that function here.
|Zero
|Zero
|Zero
|Zero
|-
|What's the estimated standard deviation of company revenue?
|6 years
|6 years
|Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stages</div>'''
|-
|How many main stages of growth is the company expected to go through?
|4 stages
|4 stages
|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>
In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub users estimate that with Tesla's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the second stage of growth (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.


On 7th February 2022, Tesla said it currently expects: to continue to generate net positive operating cash flow as it has done in the last four fiscal years; its capital expenditures to be between $5.00 to $7.00 billion in 2022 and each of the next two fiscal years; and its ability to be self-funding to continue as long as macroeconomic factors support current trends in its sales. Accordingly, based on forward looking statements, it appears that the company is in stage two of the business lifecycle  (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth remaining.
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 1?
|30%
|30%
|Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 2?
|10%
|10%
|Research suggests 10%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 3?
|20%
|20%
|Research suggests 20%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 4?
|40%
|40%
|Research suggests 40%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 2</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|79%
|79%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers is 79%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|11%
|11%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the rate for its peers is 11%.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|7%
|7%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 7%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|Stockhub suggests that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|Stockhub suggests that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 3</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|62%
|62%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 62%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|13%
|13%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 13%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|14%
|14%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the rate for its peers is 14%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|4%
|4%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 4%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|3%
|3%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 3%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 4</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|99%
|99%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 99%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|0%
|0%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the rate for its peers is 0%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|37%
|37%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 37%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|1%
|1%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 1%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|}
{| class="wikitable"
{| class="wikitable"
|+Forecast change(s)
|+Valuation change(s)
!Year
! colspan="4" |1
! colspan="4" |2
! colspan="4" |3
! colspan="4" |4
|-
|-
!
!
! colspan="2" |Forecast
! colspan="2" |Valuation
! colspan="2" |Forecast change
! colspan="2" |Valuation change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
|-
|-
!
!
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
!New  
!New  
!Old  
!Old  
Line 936: Line 785:
!Relative  
!Relative  
|-
|-
|Revenue
|Five-year expected return
|
|(24)%
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|(24)%
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|Zero
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|Zero
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|Cost of goods sold
|Annualised expected return
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|(4)%
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|(4)%
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|Zero
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|Zero
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|Recommendation
|
|Unsuitable
|
|Unsuitable
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|No change
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|No change
|
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==Risks==
ccc
==Valuation==
ccc


{| class="wikitable"
{| class="wikitable"
|+ Key inputs
|+ Assumption change(s)
!Description  
!Description  
!Value
!Commentary
|-
| Which valuation model do you want to use?
|Discounted cash flow
| There are two main approaches to estimate the value of an investment:
# By calculating the present value of the investment's expected future cash flows (i.e. discounted cash flow valuation); and
#By comparing the investment to other similar investments (i.e. relative valuation).
Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that he Stockhub users suggest to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report). 
Tesla has never paid cash dividends, and on 7th February 2022, it said that it currently does not anticipate paying any cash dividends in the foreseeable future. Accordingly, the Stockhub users suggest using the free cash flow valuation method (rather than the dividend discount model).
|-
|Which financial forecasts to use?
| Stockhub
|The only available long-term forecasts (i.e. >15 years) are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so the Stockhub users suggest using those.
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>'''
|-
|Discount rate (%)
| 15%
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
|-
|Probability of success (%)
| 90%
| Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 90%.
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''
|-
|Discount rate (%)
| 10%
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
|-
|Probability of success (%)
|100%
|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 3) is 100%.
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>'''
|-
|Discount rate (%)
| 10%
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
|-
|Probability of success (%)
| 100%
|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 4) is 100%.
|-
| colspan="3" |'''<div style="text-align: center;">Other key inputs</div>'''
|-
|What's the current value of the company?
|$950.54 billion
|As at 5th June 2022, the current value of the Tesla company is $950.54 billion.
|-
|Which time period do you want to use to estimate the expected return?
| Between now and five years time
|Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years.<ref>https://www.newyorkfed.org/mediabrary/media/medialibrary/media/research/staff_reports/research_papers/9809.pdf</ref> Accordingly, Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
|}
{| class="wikitable"
|+Assumption change(s)
!
!New assumption
!New assumption
!Old assumption
!Old assumption
!Commentary
!Commentary
!Assumption absolute change
!Assumption relative change (%)
!Resulting target price absolute change
!Resulting target price absolute change
!Resulting target price relative change (%)
!Resulting target price relative change (%)
!Assumption absolute change
!Assumption relative change (%)
|-
| colspan="8" |<div style="text-align: center;">'''Revenue'''</div>
|-
|What's the estimated current size of the total addressable market?
|$2,975,000,000
|$2,975,000,000
|Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 trillion.
If the TAM is defined as the global energy market, then research suggests that the estimated size of the market is $6.777 trillion.<ref name=":16">https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf</ref>
|Zero
|Zero
|Zero
|Zero
|-
|What is the estimated company lifespan?
|60 years
|60 years
|Tesla employs around 110,000, making the company a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>
|Zero
|Zero
|Zero
|Zero
|-
|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?
|3%
|3%
|Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.
|Zero
|Zero
|Zero
|Zero
|-
|What's the estimated company peak market share?
|10%
|10%
|The Stockhub users estimate that especially given the leadership of the company, the peak market share of Tesla is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Tesla's current share of the market is estimated at around 1.8%.
|Zero
|Zero
|Zero
|Zero
|-
|Which distribution function do you want to use to estimate company revenue?
|Gaussian
|Gaussian
|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function  (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so the Stockhub users suggest using that function here.
|Zero
|Zero
|Zero
|Zero
|-
|What's the estimated standard deviation of company revenue?
|6 years
|6 years
|Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stages</div>'''
|-
|How many main stages of growth is the company expected to go through?
|4 stages
|4 stages
|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>
In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub users estimate that with Tesla's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the second stage of growth (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.
On 7th February 2022, Tesla said it currently expects: to continue to generate net positive operating cash flow as it has done in the last four fiscal years; its capital expenditures to be between $5.00 to $7.00 billion in 2022 and each of the next two fiscal years; and its ability to be self-funding to continue as long as macroeconomic factors support current trends in its sales. Accordingly, based on forward looking statements, it appears that the company is in stage two of the business lifecycle  (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth remaining.
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 1?
|30%
|30%
|Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 2?
|10%
|10%
|Research suggests 10%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 3?
|20%
|20%
|Research suggests 20%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 4?
|40%
|40%
|Research suggests 40%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 2</div>'''
| colspan="8" |'''<div style="text-align: center;">Growth stage 2</div>'''
|-
|-
|Cost of goods sold as a proportion of revenue (%)
|Discount rate (%)
|79%
| 15%
|79%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers is 79%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|15%
|15%
|15%
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|11%
|11%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the rate for its peers is 11%.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|7%
|7%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 7%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|Stockhub suggests that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|Stockhub suggests that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 3</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|62%
|62%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 62%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|13%
|13%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 13%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|14%
|14%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the rate for its peers is 14%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|4%
|4%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 4%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|3%
|3%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 3%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 4</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|99%
|99%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 99%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|0%
|0%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the rate for its peers is 0%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|37%
|37%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 37%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|1%
|1%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 1%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|}
{| class="wikitable"
|+Forecast change(s)
!Year
! colspan="4" |1
! colspan="4" |2
! colspan="4" |3
! colspan="4" |4
|-
!
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
|-
!
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
!New
!Old
!Absolute
!Relative
|-
|Revenue
|
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|Cost of goods sold
|Probability of success (%)
|
| 90%
|
|90%
|
| Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 90%.
|
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|
| colspan="8" |'''<div style="text-align: center;">Other key inputs</div>'''
|
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|-
|
|What's the current value of the company?
|
|$950.54 billion
|
|$950.54 billion
|
|As at 5th June 2022, the current value of the Tesla company is $950.54 billion.
|
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== References and notes ==
== References and notes ==
<references />
<references />

Latest revision as of 09:04, 18 February 2024

On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023. The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581 (from $ccc). No information on the average selling price of the vehicles has been provided in the announcement.

Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the year is $ccc. The figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our company revenue standard deviation assumption by ccc years to ccc years (from ccc years). All other assumptions are unchanged. The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc).

Accordingly, based on the assumptions provided on the Stockhub platform, the investment remains a 'suitable' one for you if, among other criteria, your required:

  • Return level is 39% per year or less in absolute terms;
  • Risk level is 42% or more above the market risk level;
  • Time horizon is five years or longer; and/or
  • Objective is to help accelerate the world's transition to sustainable energy.

What's the news?Edit

On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023.

The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581 (from $ccc). Other key highlights can be found in the table below.

No details about the sales price is provided in the announcement.

Summary
Q4 2023 FY2023
Actual Change (%) Actual Change (%)
Model 3/Y Production 476,777 1,775,159
Deliveries 461,538 1,739,707
Subject to operating lease accounting 2%
Other models Production 18,212 70,826
Deliveries 22,969 68,874
Subject to operating lease accounting 3%
Total Production 494,989 1,845,985 35%
Deliveries 484,507 1,808,581 38%
Subject to operating lease accounting 2%

How does the news impact the investment thesis of the company?Edit

Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the quarter is $ccc and in the year is $ccc.

The annual figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. The figure also compares to the company's revenue amount in the previous year of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our company revenue standard deviation assumption by ccc years to ccc years (from ccc years). All other assumptions are unchanged.

The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc).

Accordingly, based on the assumptions provided on the Stockkhub platform, the investment remains a 'suitable' one for you if, among other criteria, your required:

  • Return level is 39% per year or less in absolute terms;
  • Risk level is 42% or more above the market risk level;
  • Time horizon is five years or longer; and/or
  • Objective is to help accelerate the world's transition to sustainable energy.
Forecast change(s)
Year since company inception 19 20 21 22
Year end date 31/12/2023 31/12/2024 31/12/2025 31/12/2026
Forecast Forecast change Forecast Forecast change Forecast Forecast change Forecast Forecast change
New Old Absolute Relative New Old Absolute Relative New Old Absolute Relative New Old Absolute Relative
Revenue
Cost of goods sold
Gross profit
Operating profit
Net profit
Assumption change(s)
New assumption Old assumption Commentary Assumption absolute change Assumption relative change (%) Resulting target price absolute change Resulting target price relative change (%)
Revenue
What's the estimated standard deviation of company revenue? 6 years 6 years Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here. Zero Zero Zero Zero

ForecastsEdit

Financials[1][Note 1][2][Note 1]
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59
Year end date 31/12/2005 31/12/2006[3][4] 31/12/2007 31/12/2008 31/12/2009 31/12/2010[4] 31/12/2011[4] 31/12/2012[4] 31/12/2013[4] 31/12/2014[4] 31/12/2015[4] 31/12/2016[4] 31/12/2017[4] 31/12/2018[4] 31/12/2019[4] 31/12/2020[4] 31/12/2021[4] 31/12/2022 31/12/2023 31/12/2024 31/12/2025 31/12/2026 31/12/2027 31/12/2028 31/12/2029 31/12/2030 31/12/2031 31/12/2032 31/12/2033 31/12/2034 31/12/2035 31/12/2036 31/12/2037 31/12/2038 31/12/2039 31/12/2040 31/12/2041 31/12/2042 31/12/2043 31/12/2044 31/12/2045 31/12/2046 31/12/2047 31/12/2048 31/12/2049 31/12/2050 31/12/2051 31/12/2052 31/12/2053 31/12/2054 31/12/2055 31/12/2056 31/12/2057 31/12/2058 31/12/2059 31/12/2060 31/12/2061 31/12/2062 31/12/2063
Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Historic Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
Income statement
Revenues ($'million) 0 0 0.073 15 112 117 204 413 2,013 3,198 4,046 7,000 11,759 21,461 24,578 31,536 53,823 81,462 $112,257 $154,816 $207,049 $268,527 $337,721 $411,894 $487,157 $558,739 $621,448 $670,282 $701,078 $711,102 $699,445 $667,163 $617,116 $553,551 $481,510 $406,171 $332,253 $263,564 $202,749 $151,247 $109,414 $76,757 $52,217 $34,448 $22,038 $13,673 $8,226 $4,799 $2,715 $1,490 $793 $409 $205 $99 $47 $21 $9 $4 $2
Gross profit ($'million) $33,677 $46,445 $62,115 $80,558 $101,316 $185,352 $219,221 $251,432 $279,652 $301,627 $315,485 $319,996 $314,750 $300,223 $277,702 $249,098 $216,679 $182,777 $149,514 $118,604 $91,237 $68,061 $49,236 $34,541 $23,498 $15,502 $9,917 $6,153 $3,702 $2,160 $1,222 $670 $357 $184 $92 $45 $21 $10 $4 $2 $1
Operating profit ($'million) $16,839 $23,222 $31,057 $40,279 $50,658 $123,568 $146,147 $167,622 $186,434 $201,085 $210,323 $213,331 $209,834 $200,149 $185,135 $166,065 $144,453 $121,851 $99,676 $79,069 $60,825 $45,374 $32,824 $23,027 $15,665 $10,335 $6,612 $4,102 $2,468 $1,440 $815 $447 $238 $123 $61 $30 $14 $6 $3 $1 $1
Net profits ($'million) -12 -30 -78 -83 −56 −154 −254 −396 −74 −294 −889 −675 −1,962 −976 −862 721 5,519 12,556 $13,302 $18,346 $24,535 $31,820 $40,020 $97,619 $115,456 $132,421 $147,283 $158,857 $166,156 $168,531 $165,769 $158,118 $146,256 $131,192 $114,118 $96,263 $78,744 $62,465 $48,052 $35,846 $25,931 $18,191 $12,376 $8,164 $5,223 $3,240 $1,949 $1,137 $643 $353 $188 $97 $48 $24 $11 $5 $2 $1 $0
Balance sheet
Total assets
($'million) 		8 44 34 52 130 386 713 1,114 2,417 5,831 8,068 22,664 28,655 29,740 34,309 52,148 62,131 82,338

RisksEdit

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Risk change(s)
Risk Risk change
New Old Absolute Relative
Beta 2.12 2.12 Zero Zero
Adjusted beta 2.12 2.12 Zero Zero
Recommendation Suitable Suitable Suitable Suitable

ValuationEdit

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Valuation change(s)
Valuation Valuation change
New Old Absolute Relative
Five-year expected return (24)% (24)% Zero Zero
Annualised expected return (4)% (4)% Zero Zero
Recommendation Unsuitable Unsuitable No change No change


Assumption change(s)
Description New assumption Old assumption Commentary Assumption absolute change Assumption relative change (%) Resulting target price absolute change Resulting target price relative change (%)
Growth stage 2
Discount rate (%) 15% 15% There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
Probability of success (%) 90% 90% Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 90%.
Other key inputs
What's the current value of the company? $950.54 billion $950.54 billion As at 5th June 2022, the current value of the Tesla company is $950.54 billion.


References and notesEdit

  1. ↑ Source: Stockhub Limited
  2. ↑ Source: Stockhub Limited
  3. ↑
  4. ↑ 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 4.12


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